What is an agreement?
An agreement is a specific, measurable, and time sensitive task where the person responsible for the task has a predictable process available to complete the task and all factors are within the control or influence of the person. For example, we can make an agreement to arrive at work by 9 AM every morning. We know when we need to get up and approximately how much time is needed to travel to work. We also know our method of travel (usually a car) is in good working order and is capable of getting us to work if we leave at the appropriate time. All factors are under our control.
What behavior must we manage first?
We must be able to manage our agreements if we are to demonstrate integrity. Demonstrating integrity is a critical skill for managing trust with others and for being a productive, trustworthy, team member.
At minimum there are two behaviors we all must manage in order to demonstrate integrity:
- Make only agreementswe intend to keep.
- Immediately communicate when we can’t keep our agreements to those who need to know.
What is feedback?
Feedback is data from a process for the purpose of learning. Criticism is opinion or judgment. Every employee can have the ability to give feedback about either agreements which are kept or agreements which are broken. When an agreement is kept we can say, “Thank you for keeping your agreement.” Or, “I appreciate you keeping your agreement with me.”
When an agreement is broken we also must give feedback because broken agreements can lead to broken promises to customers which will predictably lead to higher cost and/or lost customer loyalty.
When an agreement is broken we can say, “May I please give you feedback about your agreement?” We can then have a discussion to find out why the agreement was broken. “The process didn’t work. Why? How can we improve the process you are currently using to keep your agreement?”
What is accountability?
Accountability is a condition where one is aware of what they need to be accountable for, they understand a predictable process for keeping that agreement. They agree to follow that process and finally they know they will receive feedback if the agreement is not kept or the process did not work (there was too much variation).
How can we manage accountability?
Holding employees accountable to their agreements (commitments) is the most effective strategy for high performance. Holding people accountable for results can result in unintended consequences such as manipulation and/or cheating. Feedback provides the key final step for our definition of accountability. In order to create trust we must expect employees to keep their agreements. We must expect they can be trusted to have integrity. We must expect them to do what they say they will do. When they fail to keep their agreements we must remind them and bring it to their attention. This is the role of feedback. Feedback provides confirmation that people kept their agreements. It provides confirmation that people have integrity.
Everyone wants feedback. Any responsible adult will want to learn how to improve their interactions. Conversely, anyone unwilling to listen and learn is being irresponsible and possibly does not belong in the organization. Very often, irresponsible employees will quit when they know they will be held accountable to these values behaviors. Often these employees are those causing the most wasted management time on performance issues.
The average leader is not willing or able to recognize that variation occurs in every process and so they tend to see all mistakes (or any variation from their expectations) as avoidable. Some variation is avoidable and some is not. Let’s take a simple example.
Think about how long it takes you to travel to your office everyday (drive, walk, ride your bike etc.). What is the average time? Is there a great deal of variation in this process or can you predict (with accuracy) how long the trip will take? If you can predict the amount of time with fair accuracy, the process (or route you take) is probably stable. A stable process is one that has a specific capability. It can be used to make a prediction. By collecting data and plotting it onto a “control chart” a leader can begin to manage the variation in a process. A Control chart is used to monitor the variation in a process. Properly collected data are plotted on a run chart and certain limits are calculated. Data points that fall within the limits (upper and lower control limits) indicate common cause variation or random variation. Any points that fall outside these limits indicate a major change to the system.
If we properly collected data about your commute to work and plotted it in a control chart, we would probably see only common cause variation. This would mean all the data points would fall within the control limits. This means that you could predict a commute time that averages X and is not more than Y and no less than Z (where X = the average time, Y= the upper control limit and Z = the lower control limit).
If any of the data points fall outside the control limits, this would indicate an unstable process. The point outside the limit is a special cause and indicates some major flaw in the system or process. For example, if your normal route home suddenly falls into major construction, you will either be significantly delayed or will need to choose a new route. This change in the system would show up on the control chart when your trip time data point falls outside the usual control limits. This change in the system is unusual, easily identifiable, and often easy to eliminate (just take a different route. Other variation in this simple example is unidentifiable because it is due to multiple causes at the same time that continuously interact (traffic, weather, road conditions, temperature, day of the week, etc.). This is called common cause variation.
Leaders must understand the difference between common cause variation (inside the control limits) and special cause variation (outside the control limits) because each requires a different strategy. Common cause variation is not caused by any one special event. Instead it is the “voice” of the system the way the system is currently operating. If a leader wants to improve common cause variation he/she must study the process using the quality improvement tools and make decisions based on knowledge of the system. This often requires a process improvement team because processes are complex and they are interdependent with other processes in the system. A change in one process can cause an impact (unintended negative consequences) in another process. Leaders that make small changes to process with the intention to make improvements can actually make things worse unless they take the time to study the entire process.
Leaders must understand when a special cause appears so immediate action can be taken because there is an assignable cause to the change. In our commute example, the construction caused a significant increase in commuting time and is therefore a special cause. The leader is justified to take action immediately to remove the special cause (take a different route).
The key for leaders is to become aware of the variation in the processes within their control and manage that variation. This often requires the collection of data and the presentation of that data in a control chart.
Managing variation improves quality, profitability, and, shareholder value. Companies that manage variation well can bring new products to market more quickly, with minimal errors, can produce high-quality products with minimal rework, and can grow customer loyalty faster. Variation can increase all eight types of waste as detailed by Toyota:
- Waste from over production.
- Waste from waiting time.
- Transportation waste.
- Processing waste.
- Inventory waste.
- Waste of motion.
- Waste from product defects.
- Waste of under-utilization of people skills and capabilities
Waste in any form damages profitability, employee engagement, and customer loyalty. The ability to manage variation in work is a critical competency for all managers and leaders. This skill must be taught to all employees to enable an organization to manage long-term performance and customer loyalty.